Hard Money Loan Question

[Hai Doan]

I just went to a website to apply for pre approval and they require 15% of the loan amount in the account, is that the norm now?  Back in the day it didn't require this but it has been several years so I figure I would ask.

Also, do you all have recommendations for how to use for hard money lenders?

[Ramandeep Sidhu]

It is not uncommon for hard money lenders to require a down payment or equity injection in order to secure a loan. The exact amount can vary depending on the lender and the specifics of the loan. In general, hard money loans are more expensive than traditional mortgages, and lenders may require a larger down payment in order to offset the higher risk associated with these loans.

As for recommendations for using hard money lenders, here are a few things to consider:

1. Shop around: As with any financial product, it's important to compare offers from multiple lenders in order to find the best deal. Make sure to ask about the lender's terms, fees, and repayment requirements.
2. Understand the terms of the loan: Make sure you fully understand the terms of the loan, including the interest rate, repayment schedule, and any fees or penalties that may be assessed.
3. Be prepared to provide collateral: Hard money loans are typically secured by the property being financed. Make sure you have a clear understanding of what assets the lender may require as collateral, and be prepared to provide them if necessary.
4. Have a clear exit strategy: Before taking out a hard money loan, make sure you have a plan in place for how you will eventually pay it off. This could involve refinancing the property, selling it, or finding another source of funding.

I hope these tips are helpful as you consider using a hard money lender!